Thursday, November 5, 2009


Third Quarter 2009, Preliminary

Nonfarm business sector labor productivity increased at a 9.5 percent annual rate during the third quarter of 2009, the U.S. Bureau of Labor Statistics reported today. This was the largest gain in productivity since the third quarter of 2003, when it rose 9.7 percent. Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours of all persons, including employees, proprietors, and unpaid family workers. Output increased 4.0 percent and hours worked decreased 5.0 percent in the third quarter of 2009 (All quarterly percent changes in this release are seasonally adjusted annual rates).
Paradoxically (perhaps), these productivity gains should lead to employment growth in the future, provided that growth is not constrained by a decline in purchasing power.


Toby said...

"should lead to employment growth"

That's the theory, yes. But does it hold water? Why, after decades of improving production efficiencies, is demand for labour falling, as evidenced by flat to falling real wages, shrinking union power, and globally falling employment to population ratios?

The answer must in part include technological unemployment, regardless of lump of labour arguments, regardless of orthodox theorizing. The data suggest technological unemployment is a problem for monetary systems. Technological development is unstoppable. We need therefore to design an economic system that embraces this process, puts human dignity and the ecosystem at the forefront of our concerns, and takes humanity forward to its next civilizational stage.

Isn't time to look seriously at post-scarcity and resource-based economics? Haven't monetary systems reached the end of their usefulness?

Shag from Brookline said...

THD Russell might have read (or not?) Kurt Vonnegut's first novel "Player Piano" (1952) that reflected much of his comment. Sometimes fiction turns into fact.

Toby said...

No, I have not read that book, Shag from Brookline, but now I really want to.

Funny thing about my monika, it's a long story. To cut it short, the T stands for Toby ;-)

Thanks for the book tip. I'm excited to go check it out!


Anonymous said...

no doubt less enjoyable than vonnegut but might also want to look at norbert wiener's books such as the 1948 Cybernetics...

from which:

Perhaps I may clarify the historical background of the present situation if I say that the first industrial revolution, the revolution of the ‘dark satanic mills,’ was the devaluation of the human arm by the competition of machinery. There is no rate of pay at which a United States pick-and-shovel laborer can live which is low enough to compete with the work of a steam shovel as an excavator. The modern industrial revolution is similarly bound to devalue the human brain at least in its simpler and more routine decisions. Of course, just as the skilled carpenter, the skilled mechanic, the skilled dressmaker have in some degree survived the first industrial revolution, so the skilled scientist and the skilled administrator may survive the second. However, taking the second revolution as accomplished, the average human being of mediocre attainments or less has nothing to sell that is worth anyone’s money to buy.

and then include a near tripling of the global labor force since 1980. [See, e.g., Richard B. Freeman's 2004 study]


Toby said...

Thanks Juan, I have heard of that book and may well buy it one day. As to Vonnegut, I looked at the synopsis of The Player Piano and thought it sounded like a prequel to Brave New World or maybe 1984, so I'll give it a miss. Dystopias are as invalid as Utopias, as far as I'm concerned.